NASSAU, BAHAMAS – A new Inter-American Development Bank publication has further highlighted two well-known areas of weakness for The Bahamas: the public sector’s wage bill and issues with State-Owned Enterprises (SEOs).
The “Nurturing Institutions for a Resilient Caribbean” publication was released yesterday, with Deputy Prime Minister and Minister of Finance Peter Turnquest linking data from the report as key to strong economic growth and sustainable development for the nation.
While the report examined vulnerabilities faced by The Bahamas and other countries in the region, it noted that poor fiscal performance had an effect on a decline in Gross Domestic Product.
“Research documented in the publication shows that two of the main areas of public sector weakness in The Bahamas are the wage bill and the mounting transfers to State-Owned Enterprises,” said Turnquest. “The SOEs’ [$398 million] debt also entails increasing contingent liabilities for the central government.
Even as their share of the public purse has grown, the framework to obtain the timely and consistent information necessary to assess the value for money obtained by these SOEs simply has not been developed.”
Just last week, Turnquest announced that an evaluation on SOEs will start this month. It’s a move set to address any worsening debt concerns expressed earlier by credit ratings agencies.
“[The project] will result in the formation of a comprehensive strategy to cost rationalization and cost recovery for SOEs—in line with international best practices—as well as an efficient Financial and Management Reporting Model,” he said. “The project will also include the implementation of the strategic model, and the rollout of new budgeting, accounting and performance management for SOEs.”
The project is expected to take place over three phases, the first being an analysis of SOEs, authorities, and other quasi-government entities and their operations.
The second phase will include the formation of a comprehensive strategy to cost rationalization and cost recovery for SOEs—in line with international best practices—as well as an efficient Financial and Management Reporting Model.
Turnquest said last week that the third and final stage will include the implementation of the strategic model, and the rollout of new budgeting, accounting and performance management.
He noted the central message of the publication was “to place the region on a more sustainable path that spurs growth and development, [that builds resilience and fosters sustainable prosperity], many of the institutional aspects discussed require attention. Some elements are more urgent than others, and some of the countries have already made significant progress in implementing them, so the work of policymakers and the various stakeholders is to chart a course forward for each country.”